EDINBURGH, July 7 — The Scottish Government has formally launched a consultation on a proposed new tax on higher-value properties, a move that could reshape the country’s local taxation system if it becomes law. The consultation, announced on July 6, 2026, by the SNP administration, is designed to gather input from the public, property owners, local authorities, and other stakeholders. The process will run before any legislation is introduced to the Scottish Parliament.
Under the proposal, two new council tax bands — I and J — would be created for properties valued at over £1 million. This is the only specific figure mentioned in the government’s announcement, and it forms the core of what is being described in some quarters as a “mansion tax.”
Consultation process underway
The government has not specified how long the consultation period will last, nor has it set out a timeline for when any potential legislation might be brought forward. What is clear is that the proposal would require approval from the Scottish Parliament to become law. The consultation will seek views from a range of groups.
Property owners in the highest-value homes will be directly affected, but local authorities — which administer council tax collections — will also have a say. The government is also asking for feedback from the wider public, though it remains to be seen how broadly the consultation will be advertised or how accessible the process will be to those who do not own such properties.
The SNP Government has framed the move as a step toward a fairer tax system. Critics, however, are likely to argue that it could hit homeowners in areas with high property values, particularly in parts of Edinburgh and other affluent communities, and may have unintended consequences for the housing market.
Legislative path ahead
For the proposal to take effect, the Scottish Parliament must pass legislation. The SNP currently leads a minority government, meaning it would need support from at least one other party to secure a majority vote. The Scottish Greens, who have previously supported progressive taxation measures, could be a potential partner, though no formal agreement has been announced.
The consultation is the first formal step in what could be a lengthy process. No date has been given for when the consultation will close, nor for when the government might publish its analysis of the responses.
The timeline for potential implementation remains entirely unspecified in the source material. This is not the first time higher property taxes have been debated in Scotland. The Scottish Parliament already has powers over council tax bands and has used them before to adjust rates.
However, creating entirely new bands at the top end of the market would be a significant departure from the current structure.
What to watch next
Observers will be watching for several key developments in the coming weeks. The first is the level of public engagement with the consultation — how many responses the government receives, and from whom. The second is the reaction from opposition parties, particularly the Scottish Conservatives, who have historically opposed tax increases on property.
Property market analysts will also be monitoring the situation closely. Any signal that a new tax band is likely to be implemented could affect buyer behaviour, particularly at the top end of the market.
Some sellers may try to complete transactions before any new bands take effect, while buyers may factor potential future tax liabilities into their decisions. For now, the consultation is open, and the government is listening. The next steps will depend on what the public and stakeholders have to say — and on the political arithmetic at Holyrood.
